Bloomberg Talks
Netflix Co-CEO Ted Sarandos Talks Warner Bro. Deal, Future of Movie Theaters
19 Feb 2026
Chapter 1: What is the main topic discussed in this episode?
Hello, I'm Stephen Carroll. I'm in Brussels, where many of Europe's biggest decisions get made.
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Chapter 2: What is Netflix's strategy behind acquiring Warner Bros. Discovery?
There's nothing uniquely challenged about that process. We're about in the middle of it with the DOJ, with the European regulators, with regulators all around the world, and with... State's Attorney General. This is a process that we're very confident that we're going to navigate. And in fact, I'd say, again, when you look at the deals that are out there, I think people would like the status quo.
And we have a long history of running the business well and pivoting when it's time to. And adding new business lines to the business that we both get upset about sometimes. And then when we do it successfully, they're thrilled. I think advertising probably is the most recent example. Live could be a more recent example.
Some of our live sporting events could be a more recent example of things that have been pivots in the business that have gone on to grow the business very well and people are very happy about it. People don't like change. They don't like any degree of uncertainty sometimes. And anytime there's a new deal, there is regulatory scrutiny. There is execution risk, all those things.
But we are highly confident that we're going to bring this deal close and that we're going to successfully integrate the business. And I think about it as the reason why we're all talking about these deals so much this week.
We've granted the seven-day window to get some clarity about the Paramount deal because Paramount has been out spreading a lot of misinformation to shareholders, into the markets, into regulators in ways that have run the narrative into a state of confusion. We're trying to say, well, take seven days and get some clarity.
Because what we believe is, and what the Warner Brothers Discovery Board agrees with us on as well, is that our deal is a superior deal. We believe it's good for them. We know it's good for us. And we are excited about getting it done.
When you talk about clarity and certainty, one of the aspects of the Paramount deal that they have stressed is better. And I think some of the Warner Brothers shareholders seem to agree, or at least entertain it, is they're offering to buy the whole company. They will just take it out, $30 a share. Warner Brothers doesn't have to proceed with a spin beforehand.
What is your argument for why your more complex deal is better for all those shareholders than just getting the cash?
This deal is not complicated at all. It is $27.75 plus the value of Discovery Global. By the way, it's the deal that they want. It is the deal that they asked for.
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Chapter 3: How does Ted Sarandos address concerns about Netflix's financial position?
These are the assets that were for sale. So the more complex thing is buying the whole company. When you do that, then you're buying these European sports networks. As you know, sports rights in Europe are incredibly highly regulated, as is the television landscape, which they'd be stepping themselves into. So I would argue that our deal is quite simple.
$27.75 per share plus the value of Discovery Global, which I think is an incredible asset. And they do, too. That's why they set the offer up this way. That's why when we were bidding, we bid for the assets that were for sale.
If Discovery Global is a great asset, I'm just wondering, have you guys talked about just buying the whole company and doing the spin yourself?
No, as you know, the linear broadcast business is not something that we're interested in, but others are. And I think when I look at the business, particularly those European networks, are not in decline the way they are in the U.S. So it is not of our interest, but it's, I'm sure, of interest of many buyers.
Ted, you are competing in a politically sensitive media deal. There is reporting and we are in a time where the Ellisons and their relationship to the Trump administration has been discussed. It's also reported, of course, that you met with the president, I think, on November 24th.
How are you weighing that and assessing that in this scenario, that relationship between Paramount's leadership and this administration?
Look, I have spoke to the president about the state of the entertainment industry. We've had multiple conversations about how do we protect American jobs? How do we keep the entertainment industry healthy? What are those headwinds? What are those things that we're working on to try to keep production up in the United States?
We are investing a billion dollars into a new state-of-the-art production facility at the old Fort Monmouth military base in New Jersey. Obviously, the president is very keenly interested in entertainment, and he's very interested in American industry and American jobs. So those are the conversations that we've had.
I don't know why the Ellisons intimate that they have some direct line to the Department of Justice for a faster path of clearance. But I doubt that they do. This is a process that is being run by the Department of Justice. The president has been very clear on that. We've been very clear on that.
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Chapter 4: What impact will the Warner Bros. deal have on shareholders?
This deal does not represent any concentration risk at all. So those two would typically be remedies for a situation like that. According to Nielsen, we have 9% of the business. We're going to add HBO to that, and we're going to have 10% of the TV business, which is the primary driver of this deal and of our business. In the theatrical business, it's highly competitive.
There's a lot of output that's going to go through there. The reason I'm not going to put it in writing, I wouldn't want to do this deal only to put ourselves at some bizarre competitive disadvantage down the road. And I've earned some of the skepticism about the theater business because I've said things about the state of the theater business.
But I said that in the context of a business that we were not in. And today, we own Warner Brothers, we own a theatrical distribution entity, and we're gonna want to continue to invest against the success that they've had. Pam and Mike just opened their ninth number one film at the box office, nine in a row.
That's the kind of winning that we want to do with Warner Brothers and the theater owners.
You mentioned HBO and one of the concerns... Sorry, if I could go back to what you said about the trade unions as well.
I think it's very important that I would like to have the trade unions to support this deal on behalf of their membership. Because what's going to happen in the alternative of this deal, I know there's some people who believe, you know, maybe if this deal doesn't happen, there'll be no sale of Warner Brothers. This sale is going to happen. It's going to be Netflix or it's going to be Paramount.
And if it's Paramount, they've told everybody what they're going to do. They're going to have six, they've said $6 billion in cuts, but they've also told everyone who they're borrowing the money from that they're gonna de-lever the company from six or seven times down to two times in 18 months, which means $16 billion in cuts.
So that's what the trade unions who represent the people who make movies, writers, directors, producers, the crews of IATSE and the Teamsters, they're going to be working in a business that's going to be $16 billion smaller, even than the $3 billion that Paramount has already cut out of its own company.
So you're talking about an enormous contraction of the business, and the trade unions, I think, should come out and support this deal explicitly on behalf of their membership to protect employment and jobs.
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